As the demand for new homes remains down, builders are finding other creative ways to stay afloat. These attempts to branch out in other areas of the real estate market may be able to help builders remain stable until demand for new construction picks up again.
Two key areas of diversification for builders include:
1) Using available cash to invest in delinquent home loans and properties in default or foreclosure. Builders in the slow economy are seeing that there is still money to be made by investing in existing real estate. One easy way for builders to quickly amass investment property is to use their cash reserves to buy properties in distress. Using cash, builders can buy at low prices and hold these properties to grow additional equity until the real estate market picks up again.
2) Holding off on new developments but buying land in anticipation that the housing market will eventually pick back up again. Builders are positioning themselves to be competitive in the new home market by purchasing land to build on in the future. In this economic climate, land can be bought at discount prices but when buyers are ready to build again, the builders who own the most attractive pieces of land will quickly be able to get back in the game.
To read more about this story, click here.
Trackbacks/Pingbacks
[…] Market Unstable, Investors Try Other REI Areas For Survival Posted by: ed | Category: Real Estate Investing […]